Politics | The known costs plus the unknowns put clinics in jeopardy in the communities Obamacare was supposed to help

"Politics of health" Continued...

SIOUX FALLS, S.D.-Charles Shafer is used to distractions. As the medical director for the Falls Community Health Center, Shafer's day consists of juggling constant demands and questions from patients, nurses, and medical interns at this government-funded clinic in downtown Sioux Falls, S.D.

With flecks of gray in his dark beard, Shafer acts as the clinic sage-patiently enduring interruptions in his own work to parcel out advice to the clinic's 18 medical residents. In one afternoon he helps a young doctor select the right prescription. Then he guides another resident trying to decide if a patient needs a mental evaluation. It's been that way for most of Shafer's two-decade career helping the medically underserved.

With the daily demands of being a frontline doctor, Shafer admits he has had little time to reflect on the looming transformation of his profession under the new healthcare law. "The big picture is going to be-who knows?" he said. It was the only time during my afternoon visit that he didn't have an answer. "I mean, it's a little frightening. . . . I'm fearful that the whole system could come crashing down potentially."

Six months after President Barack Obama signed the healthcare bill into law, Americans-including the professionals most affected-are still trying to understand what impact it will have on families and businesses. Doctors like Shafer are only certain of one thing: Expect a lot of unintended consequences.

Obamacare for many is a far-off reality, and I found on my cross-country trip that the healthcare debate has taken a back seat to voter angst over the economy. But a recent Rasmussen poll shows that 57 percent of voters now favor repealing the law while 59 percent expect the law will lead to higher healthcare costs. Some Republicans have made healthcare repeal the centerpiece of their campaign rhetoric.

Some Democrats have been touting the reforms that have already kicked in: Dependents can now stay on their parents' policies until the age of 26 while insurers can no longer set lifetime coverage limits. But South Dakota's Rep. Stephanie Herseth Sandlin just wants the healthcare issue to go away. Sandlin, the state's sole House member, has received more than 70 percent of the vote in past elections, and she went against her party to vote against the healthcare overhaul. That hasn't helped her avoid a serious threat this November from Republican challenger Kristi Noem.

Sandlin, 39, comes from political stock: Her grandfather served as South Dakota's governor. Noem, 38, grew up on farms, likes to hunt, and is often compared to Sarah Palin.

Sandlin does not favor repealing the law. But at a debate in Mitchell, Noem said that if repeal fails, she would fight to defund an overhaul she called "too extreme, too expensive."

At Destiny Family Medical Clinic in Sioux Falls, physician Brian Kidman says sorting out the law is "kind of like asking me what I like and don't like about the dictionary."

Before the healthcare law, the Centers for Medicare and Medicaid Services projected an average annual increase of 6.1 percent in national healthcare spending over the next decade; now the Centers predict an annual spending increase of 6.3 percent. The group also found that annual healthcare spending per person will increase by $265 when all the law's provisions are in effect. Another government report, this one by the Congressional Research Service, found that states would face higher costs in light of the law.

Millions of Americans are expected to get their insurance through government-run programs under the new overhaul. Individuals whose income falls between 133 percent and 400 percent of the federal poverty level (currently $10,830 for an individual) will be eligible for subsidized health insurance beginning in 2014. Those making less than 133 percent of the poverty line will receive Medicaid.

In lightly populated states like South Dakota-with a population just over 812,000 and median household income of about $46,000, or slightly more than 400 percent of the poverty level-that means many South Dakotans will likely wind up as patients at places like Shafer's community healthcare center in Sioux Falls.

But already there can be up to a two-month wait to see a doctor here. Since more new doctors are rejecting careers in primary care in favor of lucrative specialties whose higher salaries help pay for medical school debt, Shafer may wind up calling his current workload light compared with what's coming.

"I question if we have the manpower to double the amount of patients we might see," Shafer said. "We already can't get new patients in here. We don't have the slots to do it."

In anticipation of overload, the new law pumps $1.1 billion into community health centers. But that leads to another concern: To receive federal funds the clinic already has to jump through regulatory hoops, and it's a constant temptation to put meeting those requirements ahead of meeting the needs of patients. "As a physician that doesn't feel right," Shafer said, and he is apprehensive about more strings attached to new federal healthcare coverage.

Robert Moffit, a healthcare expert with the Heritage Foundation, expects a blizzard of regulations: "It is almost as if Congress said, 'This is very complicated stuff, we will turn it over to [Health and Human Services Secretary Kathleen] Sebelius and the very smart people she has hired. They will figure it out and tell us what to do.' Unelected bureaucrats are going to determine how our lives are going to be affected."

More rules will put added stress on doctors in rural communities, such as Mitchell, S.D.-a town of about 15,000 located on Interstate 90 between Sioux Falls and Rapid City. There a group of medical professionals told me that small clinics lack the resources to navigate this federal maze. The very kinds of communities Democrats said they wanted to help with the reform may end up being suffocated by it.

It is not just doctors who should be skeptical about Obamacare: Studies are revealing that the law's provisions make it attractive for employers to drop their insurance plans and dump their workers onto new government-run insurance exchanges. An American Action Forum report predicts that the number of employees who enlist in the exchanges could be three times as high as original estimates.

Why? Private insurance premiums will rise because more healthy Americans likely will forgo insurance. Penalties for not buying insurance under the mandate are cheaper than the cost of an annual premium. Plus, the young and healthy can wait until they get sick to sign up thanks to the law's ban on preexisting condition exclusions. With fewer customers and demands under the new law to provide greater coverage, insurance companies in September filed requests with state legislators asking for between 1 percent to 9 percent rate increases on insurance plans.

Already cash-strapped small businesses will have difficulty affording the new costlier private insurance plans for their employees. One of the first regulations released under the law even makes this scenario more likely.

Obama said during the healthcare debate, "If you like what you have, you can keep it." But the very regulation designed to grandfather in already existing plans and to help businesses avoid the law's often-onerous requirements is riddled with red tape. Its own authors estimate that between 39 percent and 69 percent of businesses will not qualify. By 2013, based on the Department of Health and Human Services predictions, as many as 80 percent of small businesses will lose their grandfathered status.

"The reality for many, under this new regulation, is that if you like what you have, you can't keep it," said Sen. Mike Enzi, R-Wyo. The Senate on Sept. 29 defeated along party lines Enzi's amendment to overturn this regulation, highlighting the triumph of administrative law over elected law. "The final result of this new regulation will be that all Americans will eventually be forced to buy the kind of health insurance the federal government thinks you should have."

But it is not only small businesses that feel pinched. McDonald's Corp. told federal regulators in late September that new mandates might make it "economically prohibitive" to continue offering health insurance for nearly 30,000 hourly workers.

Jay Tolsma is a 48-year-old accountant from Mitchell, S.D., who says the new law provides economic incentives for businesses to avoid hiring more workers and to keep wages low. For his accounting firm of about 20 employees, the average wage is about $50,000. Healthcare costs run about $4,000 per employee for an annual total of $100,000. But under the new law the government will provide a tax credit of 35 percent of total premiums, or $35,000 in Tolsma's case, if the average wages are below $50,000.

"This is not a bill to contain healthcare costs, it is a bill to control healthcare," he says.

Obamacare will not be fully implemented until 2014, but the professionals I met in South Dakota already see a gathering storm. Federal regulation could further reduce the autonomy given to doctors and drive students away from pursuing medical careers. The new healthcare landscape, herding people onto government plans, threatens to overrun already burdened community health centers. And businesses will look at their bottom line in the face of rising healthcare costs and decide to keep their staff small and their wages low in order to qualify for federal assistance.

With these risks a part of increased federal regulations, nonprofit clinics, like Kidman's family center in Sioux Falls, may end up being the best option to fill the medical void in some communities.

Bible verses decorate Destiny's waiting room as Christian music fills the air. Two churches support the clinic, which provides for the area's poor on a sliding scale based on how much each patient can afford. In five years, the clinic has treated 5,000 patients. Kidman says donations keep the place afloat. They don't accept federal funds: Too many strings are attached, he says.

Kidman, who has made numerous trips to other countries for medical missions, says countries with state-sponsored healthcare systems often lack the resources and personnel to provide needed care. But the people there eventually become used to long waits and substandard care where not much is expected but the very basics. When those behind Destiny prepared to open its doors, locals initially gave the team a lukewarm reception. "The community said they didn't think we were necessary," Kidman recalled. "Certainly we must already be taking care of the poor somehow," they assumed. Destiny's success demonstrates that those needs were not being met, and the question now is whether they will continue to be under the new law.